Wall Street layoffs plunged 81% in January 2025 compared to the same month last year, while new available jobs rose modestly at investment banks and brokerage firms during the month. This marked the seventeenth consecutive time that monthly layoffs have exceeded hiring.
January 2025 Challenger, Gray & Christmas Report
According to the January Challenger, Gray & Christmas monthly Job Cuts Report released last week, the financial services industry saw planned layoffs plunge 81% to 4,529 layoffs from the 23,238 layoffs recorded in January of 2024. The January layoff total surged 526.4% from December, when 723 layoffs were recorded.
In contrast, new hiring in January 2025 was weak as financial services firms announced that 75 new jobs were available compared to no new jobs that were available in January 2024. In addition, the January 2025 hiring total was 75% lower than 300 new jobs that were available in December 2024.
As you can see from the above chart, monthly layoffs continue to run well above new hiring, a development that has led to a decline in overall net employment in the financial services industry over the past year. In fact, layoffs have exceeded hiring for seventeenth consecutive months. Over the past twenty-four months, average net employment (new hiring less layoffs) in the financial services industry has actually shrunk by 62,485 jobs as U.S. bank executives continue to shrink their headcount in the wake of consistent inflationary pressures, high long-term interest rates, and an uncertain economic outlook.
Specific January Job Cuts
In January, the world’s largest hedge fund manager, Bridgewater Associates, dismissed 90 employees or 7% of its workforce. A spokesman for the Westport, Connecticut-based firm said in a statement, “For the last three years, Bridgewater has been focused on rapid evolution, setting big goals, and fiercely stopping at nothing to achieve them. This includes doing hard things during good times, like holding a high bar and keeping the organization nimble.” In a letter that disclosed the job cuts to investors, Bridgewater said the firm’s leadership team “ensures that its strategy and resources are aligned” to achieve its objectives. “The result will be a more dynamic ecosystem of ideas, innovation, and impact that underlines our meritocratic values.”
Global investment bank Citigroup also announced during the month that it is cutting more jobs after going through an overhaul last year in order to meet CEO Jane Fraser’s expense goals. Managing directors in the wealth and technology units are departing from the firm. Additionally, Citi is reducing positions within a team that compiles data and analysis on the bank’s clients, according to individuals familiar with the situation. “Leadership changes, retirements and targeted staff changes are all normal course when running a business,” the bank said in a statement.
Our Take
While layoffs plunged and new hiring rose modestly at Wall Street firms during January 2025, net employment in the financial services industry continued to fall for the seventeenth consecutive month. Despite the modestly constructive jobs outlook seen in January, we suspect that continued high interest rates, uncertainty about the inflation outlook, and geopolitical tensions will put a damper on near-term economic activity.
These bearish macro factors are likely to impact the investment research industry as sell-side and independent research firms limit their hiring over the coming months. One factor that could boost research hiring in 2025 is an expected rise in IPO activity. The big question that remains is whether these factors are likely to encourage the buy-side to hike its spending on external research during the coming year – one factor that could lead research firms to increase hiring of research analysts and salespeople.